The F-35 is Getting Cheaper—But the F-35 Program Is Not

The latest news on the F-35 Joint Strike Fighter paints a confusing picture of the state of the often-troubled program. The Pentagon is preparing for a delay of at least seven months in the fighter's development program, and an increase in costs of more than half a billion dollars. At the same time, we're hearing new about the planes themselves getting cheaper.

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It's just the latest in the long, confused tale of the F-35. Here's what's going on.

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According to Breaking Defense, the Joint Strike Fighter is actually getting cheaper. The F-35A version of the aircraft, purchased by the U.S. Air Force and air forces around the world, costs 5.5 percent less than it did last year. Each F-35A costs $102.1 million. The vertical takeoff and landing F-35B model, built for the U.S. Marine Corps and United Kingdom, costs 1.8 percent less, at $131.6 million. The news wasn't all good, though. The Navy's F-35C model, built to handle takeoffs and landings from aircraft carriers, rose 2.5 percent to $132.2 million each.

The price drops are due to economies of scale. The more orders are placed for a particular product—be it shampoo, cars, or Joint Strike Fighters—the less it costs to produce that item because the manufacturer can buy raw materials or parts in bulk and even negotiate cheaper labor costs, and pass that savings on to the consumer. The increase in price for the -C model was due to the Navy's cutting its expected buy in half, raising the price.

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Prices for all three planes are projected to fall as development of the fighter ends and production ramps up. This is when economies of scale should push down prices even further. The target price for an F-35A in 2019 is expected to be $85 million.

About that development program, though. According to Aviation Week and Space Technology, the Pentagon believes the F-35 will be delayed—again—and cost another $530 million over budget. The F-35 is already at least five years behind schedule and more than $13 billion over budget.

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Based on reports by the Under Secretary of Defense for Acquisition, Technology and Logistics, Frank Kendall, the Pentagon has directed the F-35 program to wind up development of the fighter by May 2018. That's seven months later than the original deadline of October 2017. The head of the joint F-35 program, Lt. Gen Christopher Bogdan, believes he doesn't need quite that much time, and he estimates he'll wrap up flight testing by November 2017 or February 2018.

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On top of that, Bogdan has said the F-35's initial operational test and evaluation program will slip six months due to delays in getting enough fully operational aircraft ready. Overall, Bogdan estimates the program will slip 7 to 10 months, while the Pentagon is looking at 13 months.

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The F-35 program office, known as the JPO, has also stated that it needs an extra $532 million to complete flight testing. Of that number, $267 million is because of real cost overruns and $167 million is to comply with new security requirements. Another $100 million covers the money taken out of the budget in 2014 to cover other bills.

The U.S. Air Force and Marines have declared their modest F-35 fleets at "initial operational capability" status, which means they are able to carry out a limited set of combat tasks under demanding, wartime conditions. For now, this includes modest air-to-air and air-to-ground combat capability, in the form of firing AIM-120 AMRAAM anti-aircraft missiles and dropping GBU-12 laser and GBU-31 GPS-guided bombs. Some capabilities will be delayed several more years—the aircraft's 25-millimeter cannon, for example, won't be operational until 2019. For the most part the delayed capabilities are software-based and aircraft can be brought up to speed via updates.

All of this has cascading effects down the line. If the F-35's development is stalled another year, the $85 million dollar cost estimate for 2019 will be almost certainly thrown off track. The saga continues.

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